Siemens 2006 Annual Report Download - page 126

Management’s discussion and analysis
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Capital resources
Capital resources at September 30, 2006 included €10.214 billion in cash and cash equivalents
held in various currencies. Corporate Treasury generally manages cash and cash equivalents
for the entire Company, except in countries where local capital controls require otherwise. At
September 30, 2006, Corporate Treasury managed approximately 89% of Siemens’ cash and
cash equivalents. Corporate Treasury carefully manages investments of cash and cash equiva-
lents subject to strict credit requirements and counterparty limits.
Our shareholders’ equity at September 30, 2006 was €29.306 billion, an increase of €2.284
billion since September 30, 2005. We have authorization from our shareholders to repurchase
up to 10% of our outstanding shares at any time until July 25, 2007. Such stock may be sold via
a stock exchange; or (i) retired with the approval of the Supervisory Board, (ii) used to satisfy
the Company’s obligations under the 1999 and the 2001 Siemens Stock Option Plans, (iii)
offered for purchase to employees or former employees of the Company or any of its sub-
sidiaries within the employee share purchase program or granted and transferred with a hold-
ing period of at least two years or (iv) used to service the conversion or option rights granted
by the Company or any of its subsidiaries. In addition, the Supervisory Board is authorized to
offer repurchased shares to the members of the Managing Board of Siemens AG for purchase
as stock-based compensation under the same terms and conditions as those offered to employ-
ees of the Company. Additionally, the Supervisory Board may grant and transfer such shares to
members of the Managing Board as stock-based compensation with a holding period of at least
two years.
Our principal source of Company financing is cash flow from operating and investing
activities. In fiscal 2006, net cash provided by operating activities from continuing operations
totaled €5.174 billion. In fiscal 2006 and fiscal 2005, as part of our growth strategy, we incurred
significant cash outflows due to various acquisitions. Despite these acquisitions, as well as
higher capital expenditures, net cash provided by operating and investing activities from con-
tinuing operations was €739 million in fiscal 2006.
We have three credit facilities at our disposal, which are for general corporate purposes and
have never been drawn in the past. Our credit facilities at September 30, 2006 consist of €7.559
billion in unused committed lines of credit. The credit facilities at our disposal include a
U.S.$5.0 billion syndicated multi-currency revolving credit facility expiring March 2012 pro-
vided by a syndicate of international banks and a revolving credit facility for an aggregate
amount of €450 million expiring in September 2012 provided by a domestic bank. In addition,
in August 2006 we established a U.S.$4.0 billion syndicated multi-currency term loan and
revolving credit facility expiring August 2013 provided by a syndicate of international banks.
The facility comprises a U.S.$1.0 billion term loan and a U.S.$3.0 billion revolving tranche.
None of our credit facilities contain a material adverse change provision of the type often
found in facilities of such nature.
We also have two commercial paper programs, under which we typically issue commercial
paper with a maturity of less than 90 days, for an aggregate of U.S.$5.0 billion in the U.S.
domestic market and an aggregate of €3.0 billion in the euro market. In the third quarter of
fiscal 2006, the U.S.$ commercial paper program was increased from U.S.$3.0 billion to
U.S.$5.0 billion. Under these commercial paper programs, we had no amount outstanding at
September 30, 2006.